Changan Auto plans to invest $80 mln in S. Africa

Chinese state-owned automotive manufacturer Chana Auto Company (Changan Auto) has decided to invest US$80m in South Africa over the next five years to set up a production facility in the country.

Business Report, citing Yang Qing, the general manager of Chana International, says this investment will be spread over three phases, with the assembly plant forming the final phase. The location for the plant, however, has not been finalised yet.

The planned facility will have annual output capacity of more than 50,000 vehicles, and will create around 1,000 jobs in all. The plant will, however, be set up only when the OEM has a 4% share of the local automotive market. The company plans to turn the facility into a base for build of its right-hand drive (RHD) models.

Meanwhile, Changan Auto will focus on boosting sales through the establishment of a company to promote sales in South Africa, the report says. It will also establish a vehicle finance company, in association with China Construction Bank, Absa and WesBank.

The economic downturn has had a significantly negative impact on Changan's fortunes in South Africa. Monthly sales at the OEM fell from 400 units mid-2008, down to 100 units at present. The number of its dealers in the country has, as a result, been cut from 50 to 20.